MALLOYE & MALLOYE
[2019] FamCA 127
•8 March 2019
FAMILY COURT OF AUSTRALIA
| MALLOYE & MALLOYE | [2019] FamCA 127 |
| FAMILY LAW – PROPERTY – Where the parties were together for approximately five years and had two children together – where the husband introduced into the marriage assets of significantly greater value than the wife – where the husband is one of three registered proprietors of a property, which he alleges is held on trust for his mother – where the wife alleges the husband has a beneficial interest in the property – where that trust is found as a financial resource – where there was a two pool approach to parties assets – where the non-superannuation was assessed as 70 per cent to the husband and 30 per cent to the wife – where 75(2) factors are found to warrant an adjustment of 15 per cent to the wife for the non-superannuation pool – where both parties proposed a superannuation splitting order. FAMILY LAW – CHILD SUPPORT – where the wife seeks a child support departure order – where there was contradictory evidence as to the wife’s income – Where the wife failed to adduce evidence capable upon discharging onus which rests upon her for child departure order – Application dismissed. |
| Child Support (Assessment) Act 1989 (Cth) Family Law Act 1975 (Cth) |
| Stanford v Stanford (2012) 247 CLR 10 |
| APPLICANT: | Ms Malloye |
| RESPONDENT: | Mr Malloye |
| FILE NUMBER: | ADC | 4812 | of | 2015 |
| DATE DELIVERED: | 8 March 2019 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Stevenson J |
| HEARING DATE: | 23-24 July 2018 |
| WRITTEN SUBMISSIONS: | 5 and 15 October 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Pyke QC |
| SOLICITOR FOR THE APPLICANT: | Angela Ferdinandy |
| COUNSEL FOR THE RESPONDENT: | Mr Jordan |
| SOLICITOR FOR THE RESPONDENT: | Howe Jenkin |
Orders
The application of the wife for a child support departure order pursuant to section 117 of the Child Support (Assessment) Act 1989 (Cth) is dismissed.
Within 14 days of the date of these orders each of the parties do all things necessary to cause a distribution of the net proceeds of sale of the property G Street, Suburb J as follows:
2.1 in payment of the sum of $255,182 to the husband
2.2 in payment of the balance to the wife.
The wife indemnify the husband and keep him indemnified against all liabilities in relation to the property H Street, Suburb K including but not limited to mortgage instalments, rates, taxes and utility costs.
4.1 A base amount of $100,430 is allocated to the wife out of the husband's interest in Super Scheme 1.
4.2In accordance with section 90MT(1)(a) of the Family Law Act 1975 (Cth) the wife is entitled to be paid the amount calculated in accordance with the Family Law (Superannuation) Regulations 2001 using the base amount specified in Order 4.1, and the entitlement of the husband is correspondingly reduced.
Otherwise, each of the parties is deemed and declared to be solely entitled to all items of property, whether real or personal, and superannuation which are currently in his or her respective possession or control.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Malloye & Malloye has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: ADC 4812 of 2015
| Ms Malloye |
Applicant
And
| Mr Malloye |
Respondent
REASONS FOR JUDGMENT
The proceedings
Ms Malloye and Mr Malloye are parties to litigation in relation to alteration of property interests and child support departure. The applicant wife sought orders which may be summarised as follows:
1.the wife receive a sum of $84,524 from the net proceeds of sale of a property G Street, Suburb J (being a total sum of $260,460)
2.the wife retain the property H Street, Suburb K and indemnify the husband in relation to all outgoings including mortgage instalments
3.the wife receive a superannuation split in a base amount of $209,819 from the husband's Super Scheme 1
4.the husband retain his interest in the property L Street, Suburb N
5.the husband pay 50 per cent of the cost of the children's before- and after-school care, calisthenics club fees and uniforms, surf lifesaving fees and school excursions by way of Child Support Departure, in addition to periodic amounts assessed from time to time
The respondent husband sought orders which may be summarised as follows:
1.the husband retain his interest in the Malloye Family Trust and the property L Street, Suburb N
2.the wife pay to the husband a sum of $68,165
3.the wife indemnify the husband in respect of all outgoings relating to the Suburb K property
4.both parties do all things necessary to cause payment to the husband of the whole of the proceeds of sale of the Suburb J property
5.the wife receive a base amount of $46,887 by way of a superannuation split in respect of the husband's Super Scheme 1
6.the wife's application for a Child Support Departure order is dismissed.
The trial proceeded on 23 and 24 July 2018. Counsel for the husband and for the wife provided written submissions on 4 October 2018 and 15 October 2018 respectively.
Background
The husband and the wife, who are aged 47 and 38 respectively, began to cohabit in December 2009 and separated on 29 October 2014. They were divorced by order made in 2017.
The parties have two children, X born in 2010 (eight) and Y born in 2012 (six). The children live primarily with the wife and spend time with the husband, having regard to his work roster.
The wife has a child from a previous relationship, Z, who was born in 2005 and is presently 13 years of age. Z lived in the household of the parties throughout their cohabitation.
It was common ground that the husband introduced into the marriage assets of significantly greater value than did the wife. The husband owned a property M Street, Suburb O, which was subject to a mortgage of approximately $41,000. He also owned a car, a motor cycle and held an interest in a superannuation fund.
The husband is one of three registered proprietors as trustees of the Malloye Family Trust, and of the property L Street, Suburb N. The nature of his interest in this property was a significant issue in the proceedings. The husband alleged that the property is held on trust for his mother or, as also appeared to be suggested at times during the trial, for present and future generations of the Malloye family. The wife contended that the husband holds a beneficial interest in the Suburb N property. I will consider below the evidence and submissions in relation to ownership of and the husband's interest in this property.
At the commencement of cohabitation the wife was the owner of the property H Street, Suburb K which was subject to a mortgage. She owned a motor vehicle and held a modest superannuation entitlement. As emerged during the cross-examination of the wife, she had a liability of approximately $7,800 for speeding fines at the commencement of cohabitation. She conceded that, at the commencement of cohabitation and for a period thereafter, she made periodic payments to reduce arrears of rates in respect of the Suburb K property.
In 1997 the husband purchased the property M Street, Suburb O for $142,500. He paid a cash deposit of $15,000 and borrowed $135,000 from a credit union. At the commencement of cohabitation the balance of the credit union mortgage was approximately $41,000. There was no evidence, in admissible form, as to the value of this property at the commencement of cohabitation.
The wife purchased the Suburb K property in 2008 for $295,000 or $300,000. She borrowed $250,000 or $260,000 to fund this purchase.
The Suburb N property was purchased in the sole name of the husband in 1998 for $87,750. The husband took out a loan of $86,000 from an entity now known as D Bank. The husband alleged that he was the only member of his family who was eligible to obtain loan funds at that time and, for this reason, he became the sole registered proprietor of the property.
The husband's mother, Ms C Malloye, pays one-half of the mortgage. One-sixth thereof is paid by the husband, his brother Mr E Malloye and his sister Ms F Malloye. The husband's brother was a university student at the time of the purchase of the Suburb N property but he began to make regular contributions to the mortgage repayments when he completed his degree. In 2001 the husband's mother received an inheritance and reduced this mortgage by $38,000.
In 2001 the mortgage in relation to the Suburb N property was increased by $20,000 and these funds used to finance exterior landscaping work. In 2004 the mortgage was increased by an additional $10,000 and these funds were used to meet the cost of painting, blinds and flooring at the property. In 2008 mortgage redraw funds of approximately $15,000 were applied to the cost of an outdoor deck and paving work. A further mortgage advance of $18,000 in 2013 financed the construction of an additional room at the Suburb N property.
In 2004 the Malloye Family Trust was established, with the husband and his two siblings as trustees. On 12 May 2004 the husband transferred the Suburb N property to himself, his sister and brother for no consideration (Exhibit 8).
No financial statements for the Trust were tendered in the case for the husband. Mr E Malloye, gave evidence that there are no financial records for the Trust with the exception of bank statements.
In April 2010 the husband drew down a sum of $38,600 from the Suburb O loan and paid these funds into the Suburb N mortgage account. In July 2010 the husband drew down $34,959 on the Suburb O mortgage and deposited $18,600 into the Suburb N home loan account. He also lodged $20,000 in his mother's credit union account. The husband deposed that his mother used this money to discharge a car loan, after she retired from the workforce, and that she agreed to deposit $18,000 into the Suburb N mortgage account.
The husband sold the Suburb O property in May 2012 and received net proceeds of approximately $370,000. These funds, together with interest of approximately $6,000, were applied by the parties to the joint purchase of the property G Street, Suburb J for $656,500. They also contributed borrowings of $490,000 from the B Credit Union to the purchase of the Suburb J property.
In 2012 the parties refinanced the Suburb K property as joint mortgagors. They took out a loan of approximately $256,793 with the B Credit Union.
The parties lived with the wife's parents for approximately 18 months in 2012 and 2013, whilst substantial renovations were carried out to the Suburb J property. They occupied the home of the wife's parents on a rent-free basis. It was common ground that the parties have a debt of $3,500 to a builder, Mr P, who carried out part of this renovation work.
In 2013 the wife commenced part-time employment in healthcare. Currently she works in two practices on Monday, Thursday and Friday and alternate Wednesdays.
The Suburb K property was leased to tenants during the parties' cohabitation. There was a dispute as to the use of this rental income. The husband alleged that the wife retained an unknown amount for her own purposes between 2010 and December 2012 and, from that time, the rental income was deposited into the parties' joint mortgage offset account. The husband deposed that repayments in respect of both the Suburb K and Suburb J mortgages were then made from this joint account. The wife deposed that half of the rental was deposited into an account in the husband's sole name and the balance into the parties' joint account. Ultimately, in cross-examination, the husband said words to the effect: "The rental was managed by an agent and covered the mortgage."
When the parties separated in October 2014, the wife and the children remained in the Suburb J property. The husband stayed with members of his family until he moved into rented accommodation in February 2015. The wife and the children moved into the Suburb K property in mid-2015.
The parties sold the Suburb J property in June 2015 for $780,000. The net proceeds of this sale amounted to approximately $250,091, which was deposited into an interest-bearing account. As at the date of the trial the balance of this account was $260,460. Arrears of the Suburb J and Suburb K mortgages, in the sums of $15,301 and $3,592 respectively, were discharged from the proceeds of this sale.
The parties have engaged in ongoing disputes in relation to Child Support. The current assessment is $326 per week and, by way of departure order, the wife sought that the husband pay 50 per cent of the following costs:
1. sports club membership, fees and uniforms
2. surf life-saving fees
3. school excursions
4. child care costs (when the wife is working).
The evidence and witnesses
The applicant wife relied upon her affidavit of 18 June 2018 and Financial Statement of the same date. The respondent husband relied on the following affidavits:
1. Mr Malloye (the husband) sworn on 3 July 2018
2. Ms C Malloye (the husband's mother) sworn on 29 June 2018
3. Mr E Malloye (the husband's brother) sworn on 16 July 2018
4. Ms F Malloye (the husband's sister) sworn on 2 July 2018.
The husband swore a Financial Statement on 3 July 2018. All of these witnesses were required for cross-examination.
Approach to these proceedings
In Stanford v Stanford (2012) 247 CLR 108 the majority of the High Court of Australia held as follows at [35]:
It will be recalled that s 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under this section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
Their Honours further observed as follows at [42]:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship.
That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
The parties have lived separately for a period in excess of four years. They each seek orders for alteration of property interests, which I construe as mutual concessions that it is just and equitable that there be such orders. Independently of such mutual concessions, I am comfortably satisfied that it is just and equitable that there be orders for alteration of property interests.
The application of section 79 of the Family Law Act 1975 (Cth) (“the Act”) will determine what orders should be made for alteration of property interests. It is first necessary to determine the assets, liabilities and financial resources of the parties. All relevant contributions of each of the parties, within the meaning of paragraphs (a) to (c) of section 79(4), must be identified and weighed against each other. The matters set out in paragraphs (d) to (g) of section 79(4), particularly paragraph (e) which takes up by reference the provisions of section 75(2), must be considered and a determination made as to what if any alteration should be made to the entitlements of the parties as earlier assessed on account of contribution.
The assets, superannuation, liabilities and financial resources
Asset and superannuation
The parties were agreed as to the identity and value of the following assets and superannuation:
($) 1. H Street, Suburb K (W) 450,000 2. Proceeds of sale of G Street, Suburb J (J)
260,4603. Motor vehicle 1 (W) 21,250 4. Motor vehicle 2 (H) 25,000 5. Furniture and household effects (W) 3,600 6. Furniture and household effects (H) 2,800 7. Super Scheme 1 (H) 619,310 8. Super Scheme 2 (H) 29,290
The parties were in dispute as to the nature of the husband's interest in the Suburb N property. It was common ground that the property has a value of $380,000 and is subject to a mortgage of $99,000, with the net equity thus being $281,000.
The husband is registered on the title to the property as one of three owners in equal shares. The issue was whether the husband is a beneficial owner of a one-third share in this property or whether he holds his interest as a trustee.
The husband deposed that the property was purchased "for my mother" and that he and his siblings "agreed with our mothers that we would assist her by providing her with her own home". The husband deposed further that he and his mother and siblings instructed a lawyer "to ensure that the property be retained by the Malloye family in the long-term for the use of its siblings and their children for years to come". The husband deposed that they also instructed this lawyer "that we did not want the property to be sold and that we wanted to make a commitment to each other that neither of us could sell or deal with the property to the detriment of future generations."
Mrs C Malloye deposed as follows:
8.After much discussion about how we might buy it, my children and I came up with an idea that I would pay half and the three children would pay the rest, namely one-sixth each, and it would be my home and that the three children could come and stay for visits. It would be affordable and it would leave something for my family and future grandchildren to use in the future.
Ms F Malloye deposed as follows:
11.We had a family meeting and decided that we would help purchase the property at [L Street, Suburb N] for our mother. We had many discussions about this. [Mr Malloye], [Mr E Malloye], my mother and I agreed that we would purchase a property for her to live in and that upon her death that it would remain in the family to be used as a holiday house for future generations.
In his oral evidence the husband said, inter alia, words to the following effect:
I say I was not the sole owner of the property before 2004. My mother owned half, my sister and brother and I one-third each. ... Ownership has never changed, my mother still owns half and I own one-sixth ...
The husband said also in his oral evidence:
The Trust owns the property essentially but really it is owned by my mother, sister, brother and me.
In her oral evidence Ms C Malloye said inter alia:
When the property was purchased I understood that I owned half and my three children one-sixth each. I understood that when I paid my half of the mortgage, the rest of the mortgage was my children's responsibility.
In her oral evidence Ms F Malloye said, inter alia, words to the following effect:
My two brothers and my mother and I all had a share initially.
She said also:
I looked at it that the Trust owned the property and I gave up my ownership to a certain extent ...
In his oral evidence Mr E Malloye said:
I don't own any of the Suburb N property. The trust owns the property. The beneficiaries are the grand-children as they come through.
It is thus the case that the husband, his mother and his siblings gave inconsistent evidence as to their understanding of the ownership of the Suburb N property. They gave consistent evidence, however, of a common intention to retain the property within the Malloye family for an indefinite period.
The deed dated 23 February 2004 provided that the husband, his brother and his sister are trustees of the Malloye Family Trust. The deed records "not applicable" with respect to the office of Appointor of the trust. The "specified beneficiaries" of the trust are the husband, his brother and sister and the deed records no "additional general beneficiaries" or "additional income beneficiaries".
As a matter of law, therefore, the husband is a trustee and one of three equal beneficiaries of the Malloye Family Trust. The assertion on behalf of the husband that the Suburb N property "is now held in trust for the benefit of the broader Malloye family in addition to [Ms C Malloye]" is inconsistent with the terms of the deed which created the trust.
As noted, however, the husband and his siblings and his mother gave consistent evidence as to their intentions in relation to the treatment of this property. I accept that they have a common intention to retain the property in their family indefinitely and that there is no contemplation whatsoever of a sale. In other words, the husband holds a beneficial interest in the property according to the terms of the deed of trust but the reality is that it is highly unlikely that he would ever take steps to realise this interest. I cannot, however, ignore completely the fact that such a course of action is open to the husband as a matter of law.
It seems to me, and I find, that the husband's interest in the Suburb N property as one of three equal beneficiaries of the Malloye Family Trust is a financial resource in his hands. In my view, however, it is appropriate that his direct financial contributions to the property during the parties' cohabitation be taken into account in favour of the wife pursuant to section 75(2)(o) of the Act.
The parties were agreed as to their liabilities, which consist of the Suburb K mortgage, car loans and a debt to a builder Mr P. The wife sought to include a portion of the mortgage debt in relation to the Suburb N property but, as indicated above, I find that the husband's interest as a beneficiary of the Malloye Family Trust is a financial resource rather than an asset.
Accordingly, I find that the parties' assets, superannuation, liabilities and financial resources are as follows:
Assets ($) 1. H Street, Suburb K (W) 450,000 2. Proceeds of sale of G Street, Suburb J (J) 260,460 3. Motor vehicle 1 (W) 21,250 4. Motor vehicle 2 (H) 25,000 5. Furniture and household effects (W) 3,600 6. Furniture and household effects (H) 2,800 7. Jewellery (W) 6,000 $769,110
Superannuation 8. Super Scheme 1 (H) 619,310 9. Super Scheme 2 (W) 29,290 $648,660
Liabilities 10. Mortgage on the Suburb K property (J) 248,494 11. Debt to Mr P (J) 3,500 12. CBA car loan (W) 22,594 13. B Credit Union car loan (H) 20,545 $295,133
Financial resources 14. Husband's interest in Suburb N property as beneficiary of the Malloye Family Trust (H)
$106,300In the above balance sheet, the letters "H", "W" and "J" signify ownership of or liability on the part of the husband, the wife, and the parties jointly of assets, superannuation, liabilities and financial resources.
Contributions of the parties
It was submitted on behalf of the husband that a "two pool approach" is warranted in the present circumstances. I accept this submission, primarily because of the substantial value of the husband's superannuation fund in comparison to the non-superannuation assets. I will assess the contributions of the parties to their net superannuation and non-superannuation assets.
Non-superannuation pool
It was conceded on behalf of the wife that her initial financial contributions were much less significant than were those of the husband. He owned the encumbered Suburb O property, a car and a motor cycle and he held an interest in a superannuation fund.
There was no evidence in admissible form as to the value of the Suburb O property at the commencement of cohabitation but the sale price approximately two and-a-half years later was $502,000 (Annexure 14 to the husband's affidavit). The property was subject to a mortgage of about $41,400 (Annexure 5 to the husband's affidavit). Similarly, there was no evidence as to the value of the husband's car or motorcycle at the commencement of cohabitation. His superannuation fund had a balance of $185,472, according to a valuation dated 15 June 2018 by an actuary, Mr Q.
At the commencement of cohabitation the wife owned the Suburb K property, which she had purchased for $295,000 during the preceding year. The wife borrowed approximately $250,000 or $260,000 to fund this purchase, thus she held net equity of around $35,000 in this property. The wife owned a motor vehicle and household contents and held a superannuation entitlement of approximately $15,000. As noted above, cross-examination of the wife revealed that she had a liability for speeding fines of approximately $7,800 and unquantified arrears of council rates at the commencement of cohabitation.
The husband was employed as a public servant throughout the parties' cohabitation and undertook the role of primary breadwinner for the family. The wife was employed in healthcare until October 2010, when she ceased work shortly before the birth of the parties' child X. She returned to the paid workforce in 2013 on a part-time basis.
There can be no doubt that the wife was the primary carer of the parties' two children, both before and after separation. The husband was engaged full-time in his employment, and at times, he undertook shift work.
The wife's daughter Z lived in the parties’ household throughout their cohabitation. In cross-examination the wife conceded that she received "very minimal child support for [Z]" and stated that "her father pays when he can and irregularly". The wife conceded that the husband contributed to the financial support of Z but contended that her parents also provided such assistance.
The husband alleged that he carried out substantial renovation and/or maintenance work at the Suburb K property in April, May and June 2013. The wife disputed that the husband carried out much of this alleged work. It is impossible that findings be made in relation to these disputed issues of fact on the available evidence. In any event, it appeared to be common ground that Mr P carried out some of this work and that other contractors were employed on these renovations at various times.
The value of the husband's superannuation benefit increased from $185,472 to $410,010 during the parties' cohabitation. This increase of $224,538 arose from direct deductions from the husband's salary, together with accrued interest. These deductions from the husband's salary occurred while the wife made different contributions, particularly in the role of homemaker and parent.
During their relationship, the parties adopted traditional roles of principal breadwinner and primary homemaker and parent. The husband made a financial contribution to the support of the wife's daughter Z. The wife reduced debts of $7,800 for speeding fines and an unquantified amount for accrued arrears of council rates.
The parties had the benefit of rent-free accommodation in the home of the wife's parents for 18 months in 2012 and 2013. During this period, they undertook substantial renovations to the Suburb J property.
It was submitted on behalf of the wife that there should be a contribution finding of 70 per cent to the husband and 30 per cent to herself. That submission was based on the inclusion in the net pool of assets superannuation of an amount of $106,000 on account of the husband's interest in the Suburb N property.
It was submitted on behalf of the husband that the appropriate finding as to contribution is 80 per cent to himself and 20 per cent to the wife. That submission was based on the exclusion from the net pool of assets of any amount on account of his interest in the Suburb N property.
Having regard to these matters and the imbalance in the initial contributions of the parties, there is no doubt that there should be a finding in favour of the husband. I am satisfied, and I find, that the appropriate assessment of the contributions of the parties is 70 per cent to the husband and 30 per cent to the wife in respect of the non-superannuation pool of assets.
Superannuation assets
Each of the parties proposed that there be a splitting order in favour of the wife in respect of the husband's Super Scheme 1 benefit. The husband proposed a base amount of $46,887 and the wife a figure of $209,819. The basis of the figure for which the husband contended was not identified in the written submissions on his behalf. The Case Outline Document filed on behalf of the wife contained a calculation based on the current value of the husband's fund.
It seems to me that I cannot ignore the fact that the husband's post-separation contributions to his superannuation amount to $209,300, which is approximately 33 per cent of its current value. I will take into account in favour of the wife, pursuant to section 75(2), the husband's much more advantageous position in regard to superannuation and retirement security.
I am of the view that it is appropriate that the wife receive the benefit of a splitting order with a base amount of $100,422 in regard to the husband's Super Scheme 1 benefit. That amount equates to an amount of 20 per cent of the total superannuation benefits held by the parties, less the value of the wife's fund of $29,290.
Section 75(2) factors
The husband and the wife are aged 47 and 38 respectively and they are both in good health. Each of the parties has a capacity for appropriate gainful employment, with the husband being a public servant and the wife an experienced healthcare assistant.
There was confusion in the evidence in relation to the wife's level of income. In her Financial Statement of 8 June 2018 the wife deposed to a gross weekly salary of $550, upon which she pays income tax of $189. At different times during her cross-examination, the wife said both that the figure of $550 is a gross and a net amount. The wife's 2017 income tax assessment indicated that her taxable income was $43,825, which equates to a weekly amount of $842. The wife conceded that she omitted from her Financial Statement a sum of $93 per week which she receives as child support from Z's father. When asked about the amount of $189 per week of income tax, the wife replied "I don't really know."
The wife gave persuasive evidence that she would have difficulty in increasing her hours of employment, given her responsibility to care for Z and the parties' two children. To a large extent, the husband's work roster dictates the time which the children spend in his care. I accept that the wife's parents have their own pursuits in their semi-retirement and that they are able to offer limited assistance to her with childcare.
On any view, the husband's income is likely to exceed that of the wife for the foreseeable future. His Financial Statement indicated that he earns a gross weekly salary of $2,550 upon which he pays tax of $895, leaving a net income of $1,655. The husband has been a public servant for a number of years and thus appears to have the benefit of secure employment. To his credit, the husband acknowledged that he has a superior earning capacity to that of the wife.
The value of the husband's superannuation interest is substantially greater than that of the wife, even allowing for the splitting orders proposed by each of the parties. The value of the husband's fund might reasonably be expected to increase significantly by the time of his retirement. In my view, reality would suggest that this same benefit will not flow to the wife.
During the parties' cohabitation, the husband made contributions to the conservation and improvement of the Suburb N property. In April 2010 he drew down a sum of $38,600 on the Suburb O home loan facility and paid these funds into the Suburb N mortgage account. In July 2010 the husband drew down a further sum of $34,959 on the Suburb O property and deposited $18,600 into the Suburb N mortgage account. In his oral evidence the husband said words to the effect:
I put $6,000 into the [Suburb N] property as well as $38,600 and $18,720.
The husband said in his oral evidence that he currently pays $200 per month on account of rates and taxes for the Suburb N property. He said also that he made similar contributions throughout the parties' cohabitation. On the available evidence, it is impossible to quantify these contributions made during the parties' relationship.
The husband pays Child Support of $326 per week. As noted, the parties have a history of disputes in relation to the quantum of child support. It seems likely that they will continue to engage in disputes concerning child support.
In my view, it is appropriate that there be an adjustment in favour of the wife on account of section 75(2) factors. The husband conceded that there should be an adjustment of 10 per cent in favour of the wife, based on the exclusion of any interest in the Suburb N property from the net pool of non-superannuation assets. The wife sought an adjustment of 20 per cent in her favour, based on the inclusion of a figure of $106,300 for the husband's interest in the Suburb N property in the net pool of non-superannuation assets.
The husband is 47 years old and, in my view, has reasonable prospects of ongoing secure employment as a public servant. It is highly probable that the value of his superannuation will increase substantially prior to his retirement.
By contrast, in realistic terms the wife's opportunity to increase her level of income and the value of her superannuation will be restricted by her ongoing responsibility to provide primary care for the two children of the parties. X and Y are aged eight and six years, thus this responsibility will fall to the wife for the medium-term future.
The husband made relatively significant lump sum payments for purposes associated with the Suburb N property during the parties' cohabitation. The benefit of these contributions flowed to the husband's mother and the Malloye family, rather than to the parties and their children.
Having regard to all of these matters, I am satisfied and I find that there should be an adjustment of 15 per cent of the net pool of non-superannuation assets in favour of the wife on account of section 75(2) factors. That adjustment, in dollar terms, equates to a benefit of approximately $71,000 to the wife.
Conclusion as to alteration of property interests
I have thus determined and found that the net non-superannuation assets of the parties should be divided as to 55 per cent to the husband and 45 per cent to the wife. The net value of the non-superannuation assets is $473,977, of which 55 per cent and 45 per cent equate to $260,687 and $213,290 respectively.
The husband holds the following non-superannuation assets:
($) 1. Motor vehicle 2 25,000 2. Furniture and household effects 2,800 $27,800
He has the following liabilities:
($) 3. B Credit Union car loan 20,545 4. Debt to Mr P 3,500 $22,295
The husband thus holds net non-superannuation assets to the value of $4,505 and requires a sum of $255,182 from the controlled monies account to constitute his entitlement of 55 per cent of the non-superannuation assets. I will make orders to the effect that the husband receive a payment of $255,182 from the controlled monies account and the wife the balance thereof.
I appreciate that such orders may operate in favour of the wife to a limited extent, in that she would receive whatever interest has accrued on these funds since the trial. I am prepared, in the exercise of my discretion, to allow that benefit to flow to the wife as she has the responsibility for primary care of the two children of the parties.
I will make a superannuation splitting order in favour of the wife in relation to the husband's Super Scheme 1 benefit. For reasons indicated above, the base amount of this order will be $100,422.
In all of the circumstances, I am satisfied that orders in these terms will result in a just and equitable outcome to these proceedings.
Child Support Departure
It seems to me that there are substantial difficulties with the application of the wife for a child support departure order. The wife bears the onus of establishing that it is just and equitable that there be a departure from the administrative assessment for the purposes of the Child Support (Assessment) Act 1989 (Cth) (sections 116 and 117).
As indicated above, there was confusion in the evidence as to the wife's level of income. She gave contradictory evidence to the effect that her weekly income of $550 was a gross or a net amount. Additionally, there was confusion as to the exact cost of child care paid and payable by the wife. She deposed that she incurs child care costs of $50 per week but indicated in cross-examination that this figure was "my estimate". The wife could not provide a basis for her assertion that she pays income tax of $189 per week.
In cross-examination the wife was taken to a statement for the period 4 January 2016 to 28 June 2018 issued by R Pty Ltd (Exhibit 7). This statement indicated that the wife receives certain government benefit contributions to the costs of child care.
In these circumstances, it is impossible for me to make findings as to the wife's level of income and the amount which is payable on account of child care. In my view, the wife failed to adduce evidence which is capable of discharging the onus which rests upon her as the applicant for a child support departure order. I will dismiss this application.
I certify that the preceding eighty-seven (87) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 8 March 2019.
Associate:
Date: 8 March 2019
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Family Law
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